Incorrect Redemption Figure

mierzwin

I will try to keep it as short as possible. Back in July 2015 me and my wife decided to sell our flat. We contacted Nationwide to apply for new mortgage and we were porting our old product at the time as we were in Fixed period, so we did apply for extra borrowing to finance new family home.

Unfortunately our purchase didn't go through as it happens in 1/3 of house purchase in UK currently.

We did struggle to find new property until December 2015, by when our mortgage offer expired anyway.

Our financial position changed slightly, and actually with my increased earnings we were in position we could keep our flat on BTL mortgage and still purchase new home of the same value as we would back in July/August, so we did go with it.

As I had to release some equity I had contacted L and C brokers who helped me with 2 new applications, one for BTL and one for Residential. Prior to contacting them I spoke with Nationwide to make sure any old or expired applications are fully closed/cancelled which was in November 2015.

Everything went smooth, I did remortgage from Nationwide to Natwest for our flat and got new mortgage for Residential Family House which we should be completing this week.

Remortgage from Natwest was completed on 8th of January, I called Nationwide prior to completing just to double check what would be redemption figure and to my surprise even tho I was still in fixed period and should pay 1% fee on redemption they said it wasn the case, and balance to pay on redemption was balance of my mortgage only.

Happy days I thought Bank gave me a gift, who would complain

Before completion I filled all forms for Natwest's Solicitors and I DID mention I should be paying early redemption charge of 1% which should have been around 990 pounds to my 99k mortgage just to be safe and sure I am doing everything right. On day of completion everything was fine, Nationwide mortgage was paid off by Natwest, and difference paid to my account. The figure did look about the same as Natiowinde told me on the phone 4 days before completion, there was some telegraphic fees taken off etc. but early redemption charge wasn't there I though but as Qualified Solicitors and Nationwide themselves were providing figures I trusted them everything was up to scratch.

And now almost 2 weeks later I received a letter from Natwest's Solicitors that there was a shortfall in redemption as Nationwide didn't include Early Redemption Fee, which they forgot I think due to their own error and I need to pay £1000 to clear the balance as they apparently thought I am still porting the mortgage.

In my mind I already paid off whatever they asked and as budget is tight with 2 properties I actually used all the money already for new property and furniture moving costs etc.

But now I am not sure how to proceed whit this matter. I received the copy of the letter from nationwide together with everything else and it says they removed the charge from Land Registry now and redemption statement copy in fact it doesn't include Early Redemption Fee.

Can someone with more knowledge reply who is actually at fault and should pay off? Like I mentioned Nationwide knew from end of November I wont be going with them on remortgage as I cancelled and closed any applications, in fact that one from July was still open, so I was lucky I called them as my remortgage wouldn't probably go through If I had multiple applications with multiple banks at the same time.

I can send a copy of letters via message as being a new user cant post link yet;)

TighterThanTwoCoatsOfPain

You owe them the money. Check with your solicitor if you like but they'll say the same thing.

Same thing happened to me on completion day - I got a call 30 minutes later but still after.

(My 'gift' was £2.5k which was more than offset by new rate)

David_White

I can see where you're coming from, and it does sound like they've messed up admin wise.

That said, if it was me I'd pay the fee as it was part of the original agreement and the potential consequences of not paying it aren't worth it.

I'd 100% write a letter of complaint first though as in these particular circumstances they might waive it.

Goldiegirl

When I worked at a big lender's it would happen from time to time that redemption letters would be sent out incorrectly. If the amount in the letter was less than the amount outstanding on the mortgage, it would mean that the mortgage could not be fully repaid, and the lenders charge could not be removed.


In those circumstances, we'd write to the solicitor, asking for the rest of the money, and generally there were 3 outcomes


Sometimes the mortgage holder would stump up all of the money.


Sometimes we'd need to negotiate, and accept a partial payment.


Sometimes the mortgage holder would refuse point blank to pay anything, and in spite of our best efforts to reclaim the money, we'd have to write it off - after all it was a mistake that we'd made.


So it depends how you want to play it......and it depends how Nationwide want to play it. If you refuse point blank to pay and Nationwide won't write it off, then they won't remove their charge from the property, which will cause you a problem.


You kind of knew that there was a mistake, so this isn't such a surprise really - maybe a letter of complaint would be the best course of action and negotiations could be set in motion for a partial payment. After all, you know you should be paying this - even though Nationwide made an error - so a reduction in the amount you need to pay would acknowledge their error.

mierzwin

Thanks for your input so far. This is the letter from the Natwest Solicitors, they were not acting for me at all just for Natwest Bank:

"Following the completion of your National Westminster Bank remortgage, Nationwide have contacted our office regarding a shortfall on redemption of £1000.00. They have advised that this is due to an unpaid early repayment charge of £900 and a redemption expenses fee of £65.00.

They have confirmed that these fees were not included within their redemption statement sent to our office but advised that this was due to the fact that they understood you were to be remortgaging internally. I would stress that our office did not advise this information to Nationwide at any point and as vve do not carry out work :;n behalf of Nationwide, our request for a redemption statement shouid ilave shown that you were no longer proceeding with a Nationwide remortgage.

Please find enclosed a copy of their email for your ease of reference and the redemption statement our office used which shows that these fees were not included within the redemption total or break down.

In light of this, your mortgage with Nationwide remains open and they require payment as soon as possible in order to close the account and remove their charge from the property.

Please do not hesitate to contact me directly should you wish to discuss this further. Payment may be made either directly to Nationwide (please let me know once this has been done so that I may ensure they remove their charge without delay) or can be made to our office so that we may forward the payment to Nationwide. Should you wish to make payment to our office you may either call and pay the amount over the phone using a debit card in your name or bank transfer may be made using the following details:"

And this is a copy of a letter sent to them from Nationwide. It mentions below that they removed the charge and also I checked Land Registry and only charge registered there is Natwest Bank.


"I am w riting to you to advise of a mortgage shortfall.



n1e s hortfall of £1000 is due as your clients have not advanced a new Nationwide mortgage at the time of rf'demption.



The early repayment charge of £900.00 and £65 redemption expenses fee was not included on the redemption sta tement w hich was requested by you; as our records indicate that originally your client was intending to port either the full, or part of their existing product to a new Nationwide mortgage.



If this was no longer the case then a revised statement should have been requested from us as per the notes
u'' thE: reverse. of the statement.



"If the mortgage account is on a product which attracts an early repayment charge or redemption administration fee; but those charges are not showing on the redemption statement, this presumes that the completion of the new mortgage with Nationwide is taking place. (Porting the Balance and the Product
s imultaneously).



If this is not the case please contact Nationwide for a revised statement as this is no longer valid"



Please can you arrange to send this amount so that Ican close the account(s). You can send a cheque, or call direct to pay by debit or credit card.



In the mean time Ican confirm we have removed our charge from HM Land Registry.



If you w ish to discuss this further please call the Mortgage Redemption Team on 01604 853817. Alternatively, you can email us at HYPERLINK "mailto:redemptions@nationwide.co.uk"redemptions@nationwide.co.uk



Pleas e do not respond to this message as this service does not accept replies.



Tha nk you
"




How should I argument my complain letter? I will start with it first.

TrickyDicky101

From the NW email:

In the mean time Ican confirm we have removed our charge from HM Land Registry.

If they have no charge then they have no hold over you. I would be tempted to play hardball. I really dont take to the tone of their letter/email either.

Goldiegirl

The thing with a redemption statement is, it should be binding, and you should be able to rely on it.

From what you've said, you've done everything right, by cancelling the previous applications and querying the figure just before completion.

I think this is a case of Nationwide staff not joining up the dots, and making a mistake when they issued the redemption statement. Redemption statements are important, but they are often issued by the most junior and inexperienced staff, so these things happened.

As you have done everything you could prior to completion, and they still issued incorrect figures, and they've already removed the charge - I think this is a case where they can whistle for it!

I suggest a polite letter, detailing the facts like you've done in the post, and say that you do not feel it appropriate to pay any more, as the redemption statement should be relied upon, and you used your best endeavours to cancel the previous applications and make them fully aware of the revised situation.